Report Summary:

Tribal Casinos and Their Impacts on a California Community: A Focus on the Palm Springs Area in the Coachella Valley and the Casino Operations of the Agua Caliente Band of Cahuilla Indians

The research in this report identifies the impacts of tribal gaming and its potential growth on local communities with a focus on the Palm Springs area in the Coachella Valley and the gaming operations of the Agua Caliente Band of Cahuilla Indians.

The Coachella Valley, a community with a booming population of more than 330,000, is comprised of nine incorporated cities and seven unincorporated communities. The Agua Calientes are the only tribe in the state with two casinos. The tribe has proposed to build what may be the largest casino in the state, a $400 million resort complex that would replace their existing tent casino in downtown Palm Springs.

Palm Springs lies within the Coachella Valley in east Riverside County and is a two-hour drive from both Los Angeles and San Diego. Nearly 16 million people live within 130 miles of Palm Springs. The area is home to six tribal casinos, including the Agua Caliente operations. These casinos are among the
most successful and sizable in the state. The Coachella Valley is considered one of the strongest Indian gaming markets in California given its proximity to significant population density and easy accessibility via Interstate 10.

The tribal casinos in the area have undergone dramatic growth, which will only accelerate if the current state-mandated cap on slot machines—2,000 per tribe—is lifted. The slot cap is open to renegotiation in March 2003. Investment analysts have predicted that the area could accommodate one to two Foxwoods-scale casinos. Foxwoods Resort Casino www.foxwoods.com is the Ledyard, Connecticut Indian casino that is billed as the world’s largest casino.

California itself has become the largest tribal gaming market in the country, and is the second largest gaming market overall after Nevada. Industry experts expect California’s gaming industry to surpass Nevada’s within 10 years.

As the tribal gaming industry continues to expand it will increasingly impact and reshape the Palm Springs area in both positive and negative ways. Tribal casinos are providing unprecedented financial security to numerous Indian communities throughout the state. The casinos are creating thousands of jobs. In many areas, these casinos are both the largest and fastest growing employers and in some cases, are providing both good wages and affordable family health care for employees. The number of jobs in Indian casinos expanded 12.1% in California last year, while statewide employment grew by only 0.7%.

However, tribal casinos do not transfer funds to state and local government agencies like other businesses and local governments have no legal way to compel these enterprises to pay for the public infrastructure, goods and services that they may utilize. Tribal casinos are not subject to state and local
taxes, yet they have impacts on state and local public services. Possibly one of the largest negative impacts on state and local government is that many of the casinos provide relatively low wage jobs and employer-provided, affordable family health care is out of reach for a large number of the casino employees. This impacts state and federal financed programs that provide healthcare for the working poor and their families. In some areas around the state, tribes are signing revenue sharing agreements with local governments to offset impact costs and adopting procedures providing a fair process for casino employees to decide whether or not to unionize.

Tribal Nation status must be respected and preserved. Developing a just method to ensure that adequate financial resources get to the places impacted by the arrival of high-intensity developments will enable tribal casinos to continue to fairly benefit both tribal governments and the communities in which the casinos are situated.

With a particular focus on the Palm Springs area, this report examines the following:

• The growth of California’s tribal gaming industry;
• How other gaming jurisdictions attend to the impact costs of casinos;
• What is a fair-share contribution to the local community;
• What gaming tribes contribute in California;
• Model tribal and local government agreements; and
• The impacts of tribal casinos in terms of traffic, crime, public safety spending, education, poverty, healthcare, and housing.